A father of two and an avid Squaw skier, Sean Whelan lamented the fact that there was nowhere to take his young kids at the resort so he and his wife could ski together. But that also gave him an idea for a business opportunity — opening a much-needed daycare at Squaw.
After first approaching the ski resort more than two years ago with the idea, Whelan finally got the green light from KSL last year to move forward with the daycare. But after more than a month of construction and after Whelan had poured hundreds of thousands of dollars into the project, KSL abruptly halted construction, and two days later paved over the entire site. With Squaw Valley management declining to comment on the issue, it has left Whelan and others to wonder what this says about a corporation that wants to build a massive development in the valley.
Whelan’s idea for Mountain Kids Playcare was to serve children who weren’t yet ready to ski or those whose ski programs ended but still needed a place to go. The daycare — which would have taken up to 104 kids between the ages of 2 and 10 — would drop off or pick up kids from Mighty Mites or other lessons that ended before the 4 o’clock bell, allowing parents to ski longer. Mountain Kids was also going to have an afterschool program tailored to meet the needs of Creekside Charter School and Squaw Valley Preparatory, located in the valley.
“There were not many options for children in Squaw; if they were not taking a lesson their parents couldn’t go up the hill,” said Cynthia Wigart, who turned down a job offer with a local nonprofit to take the position of Mountain Kids director.
In August, Whelan and Squaw Valley worked out the details of the daycare. It was to be located in the east parking lot near the Village and preferred parking. Because of Squaw’s development plans, Mountain Kids was to be housed in a temporary building — a sprung structure like KidZone’s — for five years, with the option of three one-year extensions and a permanent location near SnoVentures after the expanded village was built. The terms of the agreement were laid out in a Letter of Intent to Lease signed by Michael DeGroff, vice president of resort services.
In October, Whelan and Monty Waugh, Squaw Valley Real Estate’s chief financial officer, signed an Early Entry Agreement giving Whelan the right to start building on Squaw’s property. Although Whelan did not have a formal lease, he proceeded with construction.
“I went forward based on trust and a handshake,” said Whelan, who lives in Tahoe City and develops property in the Bay Area. “In hindsight, I should have done nothing until I had a lease, but we wouldn’t have opened by Christmas.”
In late September, Whelan got to work. By early November, all the utility work was complete and work on the foundation for the 5,000 square foot building had begun. On Nov. 7, six concrete trucks were scheduled to show up when Whelan got a panicked call from his general contractor, who said Squaw management had shown up at the site, turned the concrete trucks around, and ordered them to “pause.”
According to Whelan, Squaw demanded that he consent to a “cancel at will” clause, meaning Squaw could shut down his business at anytime, for any reason. Whelan found that to be an unreasonable request.
“The cancel at will clause was never discussed by anyone,” Whelan said. “I would never have entertained doing anything with [Squaw] if that had ever been mentioned.”
At this point, Whelan speculated that maybe the ski resort pulled the plug on his project because in October, he had asked Squaw to sign a non-compete clause. He never got a response.
“Things went radio silent,” Whelan said. “It looks like now their intention never was to have a long-term relationship, or that they always wanted the ability to step in and take it whenever they wanted.”
Two days later, after Squaw stopped the project, the entire construction site was bulldozed and paved over without notice.
“They just wiped away hundreds of thousands of dollars of work,” Whelan said. “They didn’t have my permission.”
Whelan estimates he had spent $318,000 on the project, and owes another $156,000 for the sprung structure and play structure that he had already ordered.
But Whelan still held out hope he could make things work. Through his lawyer he sent a letter to the ski area demanding that it reimburse him the $470,000 he had put into the project, and that if the ski area wanted to “cancel” the daycare, it had to buy the business from him. If Squaw consented to these demands, Whelan said he would consider resuming work in April.
“I lost a lot of faith and trust. I don’t want to deal with anybody who screwed me over,” Whelan said. “But it’s also a place I love. I don’t want to have bad feelings about a place where I play with my family and (which I) love.”
Whelan was not surprised when Squaw responded on Nov. 25 that it would not adhere to his demands: “Please be aware that Squaw Valley will not be paying Mr. Whelan the money demanded,” wrote one of the ski resort’s Colorado-based lawyers in an email to Whelan’s lawyer.
Moonshine’s requests to interview Squaw officials on this subject were denied. “It doesn’t look like at this time the company can comment,” said Squaw spokeswoman Amelia Richmond.
Whelan, who believes the decision to stop his project came from Squaw’s owner, KSL, and not Squaw management, feels that the ski area’s actions reflect poorly on a company that is seeking community support for a development that has so far proved to be unpopular.
“They have a credibility and trust problem, and paving over a children’s daycare doesn’t enhance their credibility, especially when they are trying to get community support for their development plans,” he said. “It’s clear KSL doesn’t care much about the local community. If it did, it wouldn’t behave this way.”
But not all people in Squaw see it this way. Judy Carini, a member of the Squaw Valley Design Review Committee, believes that the ski resort did the right thing by halting the project. Although the design review committee did not approve the Mountain Kids project — the first time it denied a project since 1995 — Placer County overruled its decision. (However, the committee did not have a quorum.) Carini believes that KSL pulled the plug on the daycare project as a way to avoid angering the community, which was upset over the way the design review committee’s recommendations were ignored.
“Maybe they realized it was a bad PR thing for them to have the daycare sit there for five years, and every time you drive in the valley, it would be a sore thumb nagging at you,” she said. “It was a good PR move to tear it down. It was the smartest thing they’ve ever done.”
Whatever Squaw’s reasons for demolishing Mountain Kids, Whelan is left with a hefty bill. He holds out hope that he won’t have to resort to legal action against a ski area he loves.
“If forced to, I would sue, but I hope they don’t force me to,” he said. “There’s been some bad behavior and I’d like them to correct it so I don’t have to correct it myself.”
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